LowCards.com Weekly Credit Card Update–January 15, 2016

January 15, 2016, Written By Lynn Oldshue
weekly-credit-card-update (1)

Wearable Technology Will Be Used by Half of Consumers for Mobile Payments
Research firm, Gartner Inc., has released a recent prediction that wearable technology will play a tremendously larger role in mobile payments over the next few years, saying that half of all consumers will be using them or smartphones for that purpose by the close of 2018. In markets such as Japan, North America and many countries throughout Western Europe, mobile payments remain a small but growing transaction technology. Gartner feels that by 2018, they will have become popular enough that fifty percent of consumers will be using their smartphones or wearable technology devices in order to complete transactions at checkout counters in retail stores and restaurants. Story in Mobile Commerce Press.

Coin Production Costs May Help Push U.S. to Cashless Society
It now costs more money to make a penny and a nickel than the coins are actually worth, according to a new report from the U.S. Government Accountability Office. Since 2006, the U.S. Mint has been losing money producing pennies and nickels, due to rising metal prices throughout the country. A single penny now costs 1.7 cents to produce, while a nickel costs 8 cents. Logically, the way to solve this issue is for the U.S. Mint to utilize cheaper metals, but they have not been able to identify anything cheaper than zinc. Every penny is made up of 97.5% zinc. Yet another option for alleviating some of the costs of coin production would be to produce new coins to hold the same value. The drawback to this idea is that businesses, banks, and even vending machines would have to be reconfigured to accommodate the new coin. Story by Bill Hardekopf for LowCards.com.

U.S. Consumer Credit Grew Slowly in November
Americans’ outstanding debt tab grew at the second-slowest pace of the year in November as they appeared to rein in borrowing for higher education, masking a pickup in credit-card debt. The report showed faster growth in credit-card debt from the prior month and sharply slower growth in nonrevolving credit, main auto and student loans. Revolving credit, mostly credit cards, rose at an annual 7.4% rate, a steep increase from October’s downwardly revised rate of 0.1%. Nonrevolving credit rose at an annual 3.8% rate, its slowest pace since October 2011, and a drop from the downwardly revised 7.3% annual rate notched in October 2015. Story by Anna Louie Sussman and Josh Mitchell for The Wall Street Journal.

Does Bernie Sanders Understand He’s About To Abolish The Credit Card Industry?
I came across something in Salon which, even for there, seemed to me to be a very odd thing to be celebrating. Which is a speech Bernie Sanders gave in which he threatened to pretty much kill off the entire credit card industry. That isn’t, of course, what he thinks he said but it is the meaning of what he did say. If you cap the interest rate at which people can lend money, and your cap is below the economic cost of lending that money, then people don’t cut their interest rates to the new cap: they just stop lending money. And Bernie’s number for interest rates on credit cards is rather below current market rates for credit cards. In fact, only those with very high credit scores would currently be able to have a credit card under the rate Bernie is proposing. Story by Tim Worstall for Forbes.

Credit Cards Lead the Charge for Cyberlaw Issues
The payment card industry set October 2015 as the implementation date for the EMV standard (Europay, MasterCard and Visa). The standard requires merchants conducting card transactions to transition their point of sale systems to devices that can process cards that bear a microchip. The chip enables more secure transactions both by requiring a secondary authorization in the form of a signature or PIN (personal identifying number) and by creating a unique transaction code for each purchase. The import of EMV adoption is that it comes with a liability shift. Up until October, card issuers were liable for most card present fraud. Now, liability falls on the party with the least security. If the card issuer has not issued chipped cards, and many have not, the fraud liability is on the card issuer. If the merchant fails to implement card-compliant point-of-sale devices, and many have not, liability falls to the merchant. Some issues we have seen so far and will undoubtedly see more of in 2016 are that both card issuers and merchants have been slow to comply. We can expect a rise in online fraud similar to that which the EU experienced when it adopted the technology several years ago. Story by Monique M. Ferraro for the Connecticut Law Tribune.

Will Mobile Banking and EMV-Chip Cards Boost Check Fraud?
Every year for the past decade or so, fewer checks are written as consumers switch to cards and, lately, mobile apps. Total losses from check fraud have also dropped. So, thwarting check fraudsters can be crossed off your financial institution’s to-do list in 2016, right? Not so fast. According to a white paper just released by Bluepoint Solutions, Cheating With Checks: An Update on the Shifting Check Fraudscape, stemming losses from checks continues to merit serious executive attention. For one thing, checks are still a leading source of attempted fraud, according to the Federal Reserve. For another thing, the dollar value of each check transaction averages significantly more than the average card transaction. This means that each check poses a relatively larger risk than card transaction, and in fact, the average loss per fraudulent check is actually rising. Story by Alissa Fry-Harris for CU Insight.

10 Banking Trends for 2016
What’s on the horizon for the banking sector in 2016? Here are 10 trends: Fewer people will head to branches. The digital and branch experience will merge. Branches will start to go digital. Investment options at the bank aren’t likely to expand. Savings account interest rates should go up, but you won’t get rich. Banks could start charging for convenience. Online banking will remain popular but won’t replace branches. Mobile payments will continue to make in-roads. Regional banks will get in on mobile deposits. Chip cards may finally see some action. Story by Maryalene LaPonsie for U.S. News.

For the First Time, More Are Mobile-Banking Than Going to a Branch
Are you one of those people who think, “Why on earth does anyone go into a bank branch anymore,” as you tap your mobile banking app? If so, you’re not alone. For the first time ever, there are more of you than people who actually walked into a branch in 2015, according to a new survey by Javelin Strategy & Research. Last year, roughly 30% of adults in the U.S. used a mobile banking service weekly, while just 24% availed themselves of a physical branch service as often, Javelin’s survey of 3,100 people found. That’s the first time in the history of the survey that mobile users (and that means just smartphones and tablets, not via desktop computers) outpaced branch users. In 2015, one in ten consumers used mobile banking for the first time, or roughly 25 million people. Since 2010 the number of smartphone bankers has doubled, while the number of people using a tablet has jumped nearly 10 times. Story by Telis Demos for The Wall Street Journal.

LowCards.com Weekly Credit Card Rate Report
Based on the 1,000+ cards in the LowCards.com Complete Credit Card Index, the average advertised APR for credit cards is 14.89 percent, a slight  increase from last week’s average of 14.87%. Six months ago, the average was 14.65 percent. One year ago, the average was 14.44 percent.



The information contained within this article was accurate as of January 15, 2016. For up-to-date
information on any of the terms, cards or offers mentioned above, visit the issuer's website.